Nigerian Electricity Regulatory Corporation (NERC) has revealed that out of a total invoice of N671 billion for energy received from Nigerian Bulk Electricity Trading Plc (NBET) for services provided by Market Operators, only 31 percent (N206.7 billion) was paid by DisCos, creating a total deficit of N464.3bn in 2018.
“The liquidity challenge is partly due to the non-implementation of cost-reflective tariffs, the incidence of high technical and commercial losses exacerbated by energy theft, and consumers’ apathy to paying for services under the widely prevailing practise of estimated billing,” NERC said in its latest report.
NERC, though, admitted that the collection efficiency increased by about 5 percentage points relative to 2017, which means that about N3.50 out of every N10 worth of energy sold in 2018 remained uncollected as and when due.
“The severity of the liquidity challenge in Nigeria Electricity Supply Industry (NESI) was further reflected in the settlement rate of energy invoices issued by NBET and MO to DisCos,” NERC said in the report.
In the same year, the invoices issued to Ajaokuta Steel Co. Ltd and international customers such as Societe Nigerienne d’electricite – NIGELEC and Communaute Electrique du Benin – CEB by NERC stood at N1.51 billion and N49.9 billion, respectively.
A total of N8.9 billion was received from the international customers as part payment of their total debt during the year 2018, while N1 million was received from the Ajaokuta steel Co. Ltd in the same year.
“While the low remittance by DisCos to NBET and MO is partly due to tariff shortfall, the DisCos are required under the Performance Agreement to reduce their technical and commercial losses, consequently improving on their payment obligation to the market thereby improving sector liquidity,” NERC said.
During the year 2018, NERC was involved in seven new litigations instituted either directly against the Commission or where the Commission was joined with its licensees while also continuing with 23 existing litigation cases reported in the preceding year.
“The new and on-going litigations relate to alleged land trespass, ‘illegal’ disconnection by DisCos, wrong customers’ classification, suspension of Ibadan DisCo Board by the Commission, and granting of Eligible Customer status among many others,” NERC said.
The Commission handled 12 new and existing disputes between operators and customers during the year 2018, while a total of seven disputes were finalised the other cases were yet to be concluded as at the end of 2018.
Concerning the challenge of providing meter for customers, NERC indicated that only 3.7 million customers were metred which represent only 43 percent of the total 8.7 million registered electricity consumers.
The above development means the majority of customers (57 percent) are still on estimated billing, thus contributing to apathy towards payment for electricity.
The report also indicated that only Abuja, Benin and Port Harcourt DisCos had metered more than 50 percent of their customers as at the end of 2018.
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